globe.JPG 

With online services like Boston Funds, Dollardex, fundsupermart and Schwab’s together with Morningstar’s research reports also available online, it’s really not all that difficult invest in overseas mutual funds. However with the liberalisation in April 2005 by Bank Negara, effectively allowing Malaysian fund managers to also set up their own foreign funds and for local investors to invest in them, there are now even more choices for Malaysians.

 

It appears that many of the foreign funds launched locally have chosen to go the “feeder fund” or “fund or funds” route. In the case of feeder funds the local fund would feed into another global fund managed by the international big-wigs like Henderson or Schroder’s. Fund of funds in which the local fund feeds into a number of different global funds like TA’s Global Asset Allocator Fund are also available, although there are fewer of these types of funds at the moment. I really like the latter concept in that there is much flexibility in how the fund is structured.

 

However a major concern is the double layer of fees that may be payable since there are two sets of fund managers – one for the host fund and one for the feeder fund. This can significantly eat into the projected returns so we have to be very careful here. In contract, there are a number of players like Public Mutual who have preferred to go it alone instead of partnering with the established foreign fund managers.

 

I have been told that Bank Negara has limited the amount invested abroad to 30% of the local fund managers’ total assets under management. Public Mutual possibly have an advantage in terms of number of funds they can launch since they currently manage over RM$13bn worth of funds (or approx 30% of total market). But of course quantity doesn’t mean quality as we all know.

 

Anyway since most of the funds are less than a year old and a track record has not yet been established, I would proceed with caution when considering such funds and make sure that that I diversify by also putting some of my money in local funds that have shown proven results.

Some of you investors may prefer to buy directly through the online platforms but this strategy also comes with certain “issues” of its own. You will note from the comments under my previous post on Boston Funds Direct and also Public Asia Ittikal fund that people are generally concerned about knowing which funds to select, the currency risk and also the logistics of moving cash around in foreign currencies. Also, how much protection is accorded, and legal recourse available if the fund or online brokerage service goes under.

 

To continue on from part one to this post, here are more global funds locally available in Malaysia.

 

CIMB Global Titans Fund

Invests in equities in US, Europe and Japan with capital appreciation as its objective

Fund of funds

Minimum investment: RM2,000

Allocation: 50-90% in foreign equities

Annual management fees: 1.8% of NAV

 

Prudential Asia Pacific Equity Fund

Invests in Japan, Australia, China, HK, India, Singapore, Indonesia, S Korea, NZ, Pakistan, Philippines, with capital appreciation as its objective

Allocation: At least 80% in foreign stocks

 

Prudential Asia Select Income Fund

Invests 10-40% in an offshore equity fund, 30-60% in fixed income securities

Feeder fund: International Opportunities Fund – Dragon Peacock managed by Prudential Asset Management (Singapore) Ltd

Countries: India, China, Malaysia

Sales charge: 3-5% of NAV, Annual management fee: 1.5%

 

RHB Dividend Value Equity Fund

Invests in Singapore, Thailand, Indonesia, Philippines, China, HK, S Korea, Taiwan

Allocation: up to 70% in equities

 

MAAKL Pacific Fund

Invests in China, HK, Indonesia, S Korea, Philippines, Singapore, Taiwan, Thailand

 

HLG Global Healthcare Fund

Invests in companies involved in biotechnology, pharmaceuticals and healthcare equipment supplies

Feeder fund: 95% invested in United Global Healthcare Fund (from Singapore)

Fund manager: UOB Asset Management Ltd, Investment adviser: Wellington International Management Co P/L

Sales charge: 4-6% of NAV

 

Alliance Global Equity Fund

Feeder fund: Fullerton Global Equity fund

Sales charge: 5-7%

 

Alliance Global Bond

Feeder fund: Fullerton Global Bond fund

Sales charge: 0%

Both of the above are managed by Fullerton Fund Management Co Ltd based in Singapore

 

CIMB Asia-Pacific Adil Fund

Invests in Syariah counters in the Asia-Pacific region

Countries: Asia-Pacific region (14)

Minimum investment: RM2,000

 

CIMB Hidden Values Funds

Countries: India, Singapore, Malaysia, Indonesia, Thailand

Allocation: up to 70% in foreign equity markets. Remainder in local market, liquid assets and ST fixed equitites

Sales charge: 2-5% of NAV, annual management fee: 1.5% of NAV

 

CIMB Multi Maturity Income Fund 1

A closed end fund that invests in Australian corporate bonds

The mutltiple maturity feature allows investors to draw down on the investment principal according to a fixed schedule.

Minimum investment: RM10,000

Sales charge: 1% of NAV

 

Maybank Far East Capital Guaranteed Fund

A closed end single premium investment-linked fund which provides exposure to the Hang Seng and Topixx (Japan) Indices.

Minimum investment: RM15,000

Sales charge: 2.5%

 

TA SE Asia Equity Fund

Invests up to 100% in foreign equity and equity-related instruments including REITs

Countries: Singapore, Thailand, Philippines, Indonesia, Malaysia

Sales charge: 4.5-6.5%, annual management fee: 1.5% of NAV

 

TA Global Asset Allocator

Fund of funds which invests in 4 different funds from Franklin Templeton, Barclays, First State and ABN Amro

Allocation: equities, fixed income securities, property, commodity securities with a maximum allocation of 50% per asset class. Currently overweight in equities (30%)  and commodities (30%)

Sales charge: 5-7% of NAV

 

PB Asia Equity Fund

Invests up to 80% in blue chips and growth stocks in Asian countries including S Korea, Japan, China, HongKong and Taiwan

 

RHB Global Islamic Portfolio Series 1 (GIPS 1)

A closed end Syariah-compliant fund with a 5 year maturity period, and invests in a capital protected note from Deutsche Bank and equity exposure to 70 global stocks

Capital guaranteed equivalent to 100% of initial investment or 80% of highest NAV, whichever the higher

Minimum investment: RM 100,000

Service fee: nil

 

Pheim Asia ex Japan Fund

This fund invests in value stocks and has a targeted absolute return of 7% p.a..

The Singapore equivalent of this fund, Vittoria Fund achieved a phenomenal 120.7% for the 5 years ended 31 May 2006.

Sales charge: 3-5% of NAV

 

Am-Global Property Equities Fund (see previous post)

Invests in listed property companies and REITs from North America, Europe and Asia-Pacific

Feeder fund: Henderson Horizon Global Property Equities Fund which is managed by Henderson Global Investors (Singapore) Ltd

Sales charge: 4.76% of NAV, Exit charge: 1% of NAV if redeemed within 90 calendar days

 

OSK-UOB Global Yield Fund

Invests in high dividend yield equities  in up to 31 countries, with long-term capital appreciation as its objective

 

Public Far East Select

Invests in blue chip and growth stocks

Countries: S Korea, China, HK, Taiwan, Philippines, Thailand, Singapore, Indonesia

Allocation: up to 70% invested in offshore stocks

Sales charge: 5-7% of NAV, annual management fee: 1.5% of NAV

 

Public Asia Ittikal Fund (see previous post about this fund)

 

So it looks like there are quite a lot of choices available and still more coming up. Unfortunately fees seem to be getting higher, in a landscape where overall fees are already very high. I note that some of these funds now charge annual management fees of 1.7% and upwards. We need an “Air Asia” or “Digi” or “_________” (insert your favourite China brand J ) to come into the market to blast it wide open….!! Sounds like a job for the Malaysian Bogleheads…wherever they may be!

Advertisements